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CRP in the News
August 2006


CRP Completes the Sale of The Richardson Company

In August, Capital Resource Partners completed the sale of its investment in The Richardson Company to ClearLight Partners and management. Richardson is a premier global sales training and consulting firm founded in 1979 by Linda Richardson, a recognized leader in the sales training industry credited with the movement to consultative selling. Richardson accelerates the productivity of sales professionals by ensuring they have the skills, strategies, and processes to achieve their objectives and implement their organization's strategy. Since CRP invested $13.9 million in Richardson in January of 2000 to finance expansion, the Company has successfully expanded its client base, global reach, and scope of services, including the launch of its eLearning QuickSkillsTM platform. As a result, the company has expanded its revenue by 84% from CRP’s investment.

 


 

New Research Report Highlights Virtualization Capabilities of the Ardence Software-Streaming Platform

Ardence Inc., the leader in developing software platforms for the on-demand world, today announced that industry analyst firm Enterprise Management Associates (EMA) has praised Ardence's Software-Streaming Platform in a non-commissioned report that reviews current industry perspectives on virtualization. The report, titled "Virtualization: Exposing the Intangible Enterprise," cites Ardence's approach as one that is creating a new paradigm for dynamic, cost-effective software deployment.

Virtualization - the technique of managing systems and resources functionally, regardless of their physical layout or location - represents a powerful breakthrough in IT efficiency, responsiveness and agility. In the report, Andi Mann, senior analyst at EMA, states, "The Ardence Software-Streaming Platform delivers the right host operating system, virtual machines and applications to the right computer, to do the right job at the right time. The streaming approach is creating a new paradigm for dynamic, cost-effective software deployment. Using Ardence's software-streaming technology, IT can instantly deliver a completely provisioned x86-based computer - desktop, server, or device - with a Microsoft Windows OS or Linux OS from bare metal to production in seconds."

The report goes on to state that "unlike most other vendors in the virtualization arena, Ardence provides a full provisioning capability from bare metal to applications and data. This differs from pure-play server, operating system, and application virtualization by providing a complete package that can be booted from the network to completely provision an operating environment."

The Ardence Software-Streaming Platform delivers the host environment and any virtual software - operating system or application - on-demand from network storage and thus turns the computer into an appliance. This eliminates the need to pre-load and test host OS software, virtualization software or application software. The PC has absolutely no software, no OS or application loaded. It plugs on the network and when it is powered up, it gets the right software to do the right job at the right time.

"Virtualization is becoming increasingly important in the enterprise because it provides organizations with the ability to deliver the right software to the right place as it is needed - increasing business agility and IT productivity," said Richard J. Davis, Chairman, President and CEO of Ardence, Inc. "Industry experts and customers are coming to the same conclusion - the Ardence Software-Streaming Platform provides breakthrough virtualization capabilities and value."

A copy of the report is available for download at www.enterprisemanagement.com.

 


 

Softbrands Completes Acquisition of Hotel Information Systems

MINNEAPOLIS, Aug. 15 /PRNewswire-FirstCall/ -- SoftBrands, Inc., a global supplier of enterprise application software, has completed its acquisition of MAI Systems Corporation and its subsidiary Hotel Information Systems (HIS).

SoftBrands has completed its financing and has executed a credit agreement providing $21 million to finance the acquisition under a term loan maturing in seven years. The principal amount of the term loan is repayable in 78 equal monthly installments, commencing March 2007. The Credit Agreement also provides for a revolving line of credit under which SoftBrands may borrow up to $9 million, subject to certain conditions.

orrowings bear interest, payable monthly, ranging from 1.0% to 1.75% over the lenders' prime rate, or from 2.0% to 2.75% over the London Inter Bank Offered Rate, depending on certain levels of earnings of SoftBrands for the twelve months preceding the monthly calculation date.

SoftBrands also closed on the sale of 5,000 shares of its Series D Convertible Preferred Stock and warrants to purchase 333,333 shares of common stock for gross proceeds of $5 million. An additional 1,673 shares of Series D Stock and warrants to purchase 111,534 shares of common stock for gross proceeds of $1.7 million may be purchased by certain current shareholders through early September 2006. The warrants are priced at $1.84 per share. The Series D Stock carries an 8% dividend and converts to common stock at a price of $1.67 per share.

As a condition to such sale, SoftBrands also exchanged 18,000 shares of its Series C Convertible Preferred Stock on a share-for-share basis, with 18,000 shares of Series C-1 Convertible Preferred Stock on substantially the same terms as the Series C Stock with the exception of a dividend rate of 8%.

Hotel Information Systems, the makers of the epitome(TM) hotel property management systems and core central reservations system, serves more than 2,300 hotel properties, primarily in the Americas and Asia.

 


 

Softbrands Partners With Alpha Solutions Limited to Grow Market Share in the Caribbean

MINNEAPOLIS, Aug. 22 /PRNewswire-FirstCall/ -- SoftBrands Inc. , a global supplier of enterprise application software, today announced it has selected Alpha Solutions Limited, a leading provider of information technology solutions for the hospitality industry, as its exclusive seller and installer of SoftBrand's Medallion property management system in the Caribbean.

Located in Trinidad, West Indies, Alpha Solutions Limited provides a broad range of integrated accounting and business management software solutions in Trinidad and Tobago and the wider Caribbean. Alpha Solutions Limited will sell Medallion as its exclusive property management system offering.

"Alpha Solutions Limited is very excited about our partnership with SoftBrands. SoftBrands is a highly regarded company and Medallion is an excellent product that addresses the needs of a market segment that hasn't had anything like it before. We have great expectations in bringing this outstanding product to the Caribbean," said Winston Drayton, CEO of Alpha Solutions Limited.

SoftBrands has a long history of providing exceptional property management solutions to customers worldwide, evidenced by the rich legacy of its successful LANmark and IGS solutions. Continuing the tradition of excellence, Medallion has been designed to help independent hotels and hotel groups increase revenue per available room and deliver a more memorable guest experience, while maintaining the ease of use that has made the product the choice of hotels around the globe.

"The partnership with Alpha Solutions Limited expands SoftBrands' growing global network of business partners and opens new channels through which to expand Medallion's market share," said Steve VanTassel, SoftBrands' senior vice president, hospitality. "With their solid reputation and considerable experience providing solutions to the hospitality industry in the Caribbean, Alpha Solutions Limited will further establish Medallion as a world class property management solution."


 

United Country Named to Wall Street Journal’s List of Top Franchisors in America

WSJ's Startup Journal
The 25 Franchises That Made the Cut for Our List
By LAUREN BAIER KIM

For prospective franchisees contemplating a purchase, the number of options can be daunting. In the U.S. alone, there are more than 2,500 brands, according to FRANdata, an Arlington, Va.-based independent franchise research firm. Start-up costs for new franchisees vary significantly and, in some cases, reach into the seven figures. With the number of brands to consider and, potentially, a big investment at stake, how can would-be franchisees narrow their choices to a manageable list of concepts?

StartupJournal turned to FRANdata to help us come up with a group of 25 high performers for our readers' consideration. Ultimately, we cannot say that these franchises are the best in the U.S. or that they are the outfits that will net potential franchisees the most profit. Rather, we looked to create of list of franchises that are well established, have experienced leadership, exhibit overall financial health and have a proven record of franchising success. Our list is not a ranking; franchises appear in alphabetical order.

To get to our 25, we began with a universe of 1,458 systems for which detailed performance information was available for 2005 from their Uniform Franchise Offering Circulars, including audited financial statements. Only brands with separately disclosed financial performance data were included in the final list. That meant excluding outfits like McDonald's Corp. and Dunkin' Brands, Inc. from consideration because they combine performance data for their multiple brands.

The list was reduced to a group of 37 companies that met the following criteria:
• Seven or more years of experience franchising.
• A minimum of 100 franchise units.
• A below-average turnover rate for 2004 (the most current available data). The turnover rate reflects the portion of a company's existing franchise units that were either closed ("cancelled" in franchise jargon), sold back to the franchiser ("reacquired") or sold to another franchisee ("transferred"). For that year, the industry average turnover rate was 12%.

A company's years in franchising and its number of franchised units are important because they show the experience a company has in franchising, says Darrell Johnson, president of FRANdata. "If you look at a company that only has one year of franchising experience, it might not know how much support to provide franchisees," even if it knows a great deal about its core business, he says. A company that has a greater number of franchise units will have "experience dealing with a wider range of services, franchisee business issues and franchisee personalities."

Franchisee turnover offers clues to franchisee success, Mr. Johnson says. While some turnover is healthy (e.g., a sale of a profitable franchise), high turnover may indicate a lack of stability, says Mr. Johnson. For example, a dissatisfied or unsuccessful franchisee might sell a franchise or close at a loss.

Once we reduced our list to 37 franchise brands, we canvassed those companies with the following variables in mind:
• Franchises' net income/shareholders' equity ratio
• Projected additional franchise units for 2005
• Franchise unit cancellations
• Top executives' experience at the company

We looked at their net income (profit) and shareholders' equity (assets minus liabilities) for fiscal 2004 to try to ensure that franchises on our list were financially sound. The capital base of franchises in our final 25, as measured by shareholders' equity, was at least $950,000 for fiscal 2004. All franchises in our final group exceeded a 25% return-on-equity ratio (net income divided by shareholders' equity) average over the past three years and in 2004. It's also worth noting that our 25 franchises had positive net income over the prior three years.

We also looked to see whether the franchise was in a growth mode. We included only systems in the final analysis that were projecting nine or more units for 2005.
In trimming our list, we also took a closer look at turnover, specifically at cancelled units, or units that were closed. All 25 companies on our list had a cancelled unit rate of less than 3% in 2004.

We wanted the systems on our list to have top executives with significant experience at the company. All the franchises on our list had top executives with at least six years of experience at the company.

Looking over our list as it stood, we eliminated two more franchises. One we dropped because it was extending its franchise only in rural markets and through existing businesses under a co-branding arrangement. Another franchise with more than 700 units had a net growth in units of only 20 in the past five years; we thought readers would want to see franchises with more active expansion plans.

Thus, we came up with our list of 25. Is each one right for every prospective franchisee? Certainly not. Minimum investment alone is a differentiating factor. Start-up costs can range from a few thousand dollars in the case of, say, Cruise Planners, to more than a million dollars in the case of Pizzeria Uno. (These figures exclude real-estate purchase costs.)

This list, and our look-up tool for it, should serve as a starting point. StartupJournal will be doing an ongoing series of franchising articles throughout the year to provide our readers with information that will help them make the best investment for them and then make the best of their investment. If you have thoughts on this list, or our coverage in general, please email them to sjeditor@dowjones.com. We look forward to hearing from you.
-- Ms. Kim is a senior editor at StartupJournal.com.


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